FREEDOM OF WITHDRAWAL: Was refused a loan

– It was a really tough period, quite frankly, says Nematollah Heidari.

He is one of many Norwegians who have asked for freedom from installments from the bank.

He got that for one year, in 2020. In 2021, he again had to pay both interest and installments.

Heidari lives at Hønefoss with his wife and two small children. He has worked as a baker and professional driver since he came to Norway in 2003.

But four years ago he fell ill. For a period he received work verification money, before he recently became disabled. Then his income fell sharply, and he had problems covering all his expenses.

In 2022, Heidari again had to ask the bank for freedom of payment. But this time he was refused.

Doubling in the number of applications

TV 2 has asked five banks about which loan measures Norwegians take during the day.

On Thursday, it became clear that Norges Bank is keeping the key interest rate unchanged of 2.75 percent. At the same time, the governor of the central bank announced that interest rates will continue to rise in March.

Storebrand states that they have had a doubling in the number of customers who have been granted interest-free installments in December 2022, compared to the previous year.

– There is no doubt that more and more people feel they have to go through their finances and see where they can save a few kroner, says Heidi Skaaret, executive vice president for the retail market at Storebrand.

– More and more people are struggling with higher expenses and prices, but at the same time it is good to see that more people are going through their finances and contacting us to get help to deal with the new challenges.

Nordea is also experiencing a doubling in the number of applications dealing with freedom of installments.

– There is clearly a large increase in the number of applicants, and I do not remember that we have seen such a large increase before. And it’s about an uncertainty among households that now comes from increased expenses, says Randi Marjamaa, head of the personal market at Nordea.

Most people get it granted

At Danske Bank, they have experienced a 30 per cent increase in the number of applications for interest-free installments and extension of the term in December 2022, compared to the previous year.

– The vast majority of those who apply for exemption from installments are granted it. When it comes to extending the term, it is very individual, but all agreements are made in a dialogue with the customers, says Øystein Schmidt, press manager at Danske Bank.

Marjamaa in Nordea estimates that around four out of five will have their application for exemption from installments approved.

– The applications for exemption from installments are largely about increased household expenses. There has been an increase in electricity prices, food costs, and of course also interest, says Marjamaa.

At the same time, she emphasizes that freedom of installments has its limitations.

– There is always talk of it being a temporary solution to help you get your costs paid and get back on track with the economy, says Marjamaa.

Want the rules to change

During the pandemic, when the future was very uncertain, the authorities eased the banks’ ability to give customers freedom of payment.

The authorities then increased the flexibility quota from 10 to 20 per cent. This gave the banks greater opportunity to, for a limited period, grant interest-free mortgages.

Now Nordea wants the authorities to relax the rules again.

– We want an opportunity to be re-introduced to give a limited two-to-three month repayment deferral to “all” customers who feel that they have a much tougher economy due to price increases, interest rate increases and electricity prices, says press manager at Nordea, Cathrine Graff.

Had to change banks

Heidari, who was granted repayment freedom during the pandemic, was refused when he asked for it again in 2022. This despite the fact that he has repaid around 50 per cent of the loan.

According to Heidari, the justification from the bank was that he had an unclear situation. His wife is studying and he himself was on unemployment benefits at the time.

Instead, he ended up having to move the loan to Husbanken.

– I am grateful to the Husbanken in Ringerike municipality, which has helped me. If we hadn’t received help, I’m sure we wouldn’t have been able to keep the house, says Heidari.

At Husbanken, he has had the repayment period extended from 25 to 35 years, and received a fixed interest rate of 4.2 per cent. In addition, he has had consumer debt refinanced.

Now he is relieved that he does not have to think about interest rate hikes for quite some time to come.

– I won’t care if it goes up 100 percent.